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Foundations Give Away the Most Money (and Other Myths about Grants and Foundations)

Guest post by Kathie Kramer Ryan 

My favorite thing about foundations is that they exist to give money away. Program officers are paid to answer questions from potential grantees and share information about funding priorities. And when you receive a grant, the award letter stipulates the reporting schedule. Foundations are donors who tell you what they’re interested in, their process for considering a gift, and how they like to be stewarded. How great is that?  kkr

Less great is media focus on the largest grants given by the largest foundations. I’m always thrilled to see philanthropy in the news, but covering only the upper echelon of grant funding is misleading. Here are 3 foundation myths of which to be aware as you plan your grants strategy. 

Myth #1:  Foundations are the best source of charitable support because they give away the most money. 

Board members and other stakeholders (your CEO perhaps?) may believe you can raise your entire annual fundraising goal from foundations alone.

Reality:  If you step back and look at the big philanthropic picture, foundations are responsible for only a small sliver (between 10% and 15%) of total charitable donations in the U.S. each year. The vast majority of charitable giving (usually over 80%) comes from individuals. In fact, an additional portion of foundation giving is attributed to individuals since many foundations are family foundations—funded and guided by the interests of a single donor or family. 

Giving USA releases an annual state of philanthropy report in early summer each year, so keep an eye on their website for the latest figures. Also, here’s a good article on the 2012 figures from the Nonprofit Times

Myth #2:  Foundations are good sources of ongoing and unrestricted support. 

Reality:  There may have been a time when foundations gave out large, multi-year general operating support grants, but if so, those days are gone. More and more, foundations target support toward specific programs and/or help new projects get off the ground. Planning grants are another opportunity. 

Regarding ongoing support, foundations often prohibit organizations from receiving grants for more than three years in a row and sometimes less. Additionally, grant applications increasingly ask nonprofits to provide a sustainability plan for continuing a program after the grant period has ended.  

Myth #3:  Foundation grants are the quickest, easiest way to raise money.                Chalkboard - Facts And Myths

A lot of people seem to know a little something about foundations. You might run into the view that a foundation is like an ATM machine—you feed in your proposal and out comes a check.

Reality:  It’s seldom, if ever, this easy! Many many organizations are applying for the same grant money for which you are applying. To be successful with grants, consider these major gifts tactics:

  • Cultivate a relationship with the foundation
  • Ask a lot of questions
  • Have multiple meetings or site visits
  • After submitting a proposal, revise that proposal according to foundation feedback

As the foundation’s board (decision makers) may only meet four times per year, the process takes time. The entire cycle may take as little as 1-2 months. More common is 3-6 months, sometimes close to a year. Once your grant program is up and running and you have multiple proposals in the pipeline, you’ll get answers from different funders more often. But it takes time and elbow grease to build the pipeline.

Also keep in mind the significant amount of staff time required on the back end to manage grants. Grant money arrives on your doorstep with strings attached. If it’s a restricted grant, your finance staff must have the capability to track spending of grant funds so you can report back to the foundation on how funds were used. Your progress report’s narrative component will require program and development staff to gather data and prepare an analysis and conclusions about your work over the grant period.

Grants are certainly a viable funding stream but they are not a fix-all for your entire budget. For inspiration, check out Unlock Your Grant Writing Talent.

Please share some of your foundation fundraising experiences. What surprises have you encountered and what hurdles have you overcome?

Kathie Kramer Ryan has 15 years of frontline fundraising experience. A former development director, Kathie enjoys sharing her knowledge of nonprofit management and development with other fundraising professionals. You can learn more and find fundraising tips from Kathie at ArroyoFundraising.com.

The Two Cornerstones of Fundraising

By: Sandy Rees

Fundraising can be easy or it can be hard. I know because I’ve done them both ways.

When it’s easy, it’s fun and effortless. When it’s hard, I dread it and find ways to procrastinate. (I bet you understand that!)

Successful, easy fundraising is built on two things that are so important, you should be working on them every day.  They are trust and attention.                               Easy Vs Hard Way Road Sign                                       

Everything you do in fundraising should build trust with your donors and prospects. People need to feel they can trust you before they’ll make a gift. After all, they want to know you’ll do the right thing with their money.

In addition to building trust, you must pay attention to your donors and prospects. Too many nonprofits work from their ego.  Their communications are inwardly focused and boring. They talk about what they’re doing: “We served 500 people last month. We offer 4 programs. We’re the only certified center in the Midwest” And on it goes, blah, blah, blah.

Even though lots of people think they can multitask, they can really only pay attention to one thing at a time. That means we all have dozens if not hundreds of things begging for our attention and we can only choose one at a time.

 

In this world of overscheduling and time deprivation, you’re competing for the attention of your donors, not their dollars.

 

Seth Godin wrote

“The two scarce elements of our economy are trust and attention. Trust is scarce because it’s not a simple instinct and it’s incredibly fragile, disappearing often in the face of greed, shortcuts or ignorance. And attention is scarce because it doesn’t scale. We can’t do more than one thing at a time, and the number of organizations and ideas that are competing for our attention grows daily.”

What can you do to get your donors’ and prospects’ attention? When you get it, will you have something worth their time?  And once they decide to make a donation, what can you do to build trust with your donors? How can you make sure that you help them feel really good about their decision to give to you? It’s worth the time to think about and plan for.

 

 

 

Focus on your donors in three easy steps

By: Karla Kurtz

Being donor focused will make all the difference in your fundraising success. It means that everything you do is centered on them and how they see things. It helps them feel good about their decision to give to you, and ultimately, this will keep your donors around for a long time.

Put yourself in their shoes and look at your organization through your donor’s eyes.  Committing to be more donor-centric can have a dramatically positive impact on your organization and its fundraising efforts.  When your donors stop feeling like an ATM machine, and instead feel like a partner in your work, the magic begins to happen. 

When a donor feels engaged, she will give more and give longer.

                                                                                                                                                                                                                                                                                                               Education child Mathematics Class
So where do you start to become more donor-focused?  Here are three things you can start doing this week that will pay big rewards with a minimum investment of time.

1. Get good at first impressions. Think about the donor’s first impression when they call your organization, stop by your office for a visit, or make a donation.  Who do they see and talk with first (a live friendly person or automated system)?  Can they easily find their way into your parking lot and building and is the environment warm and welcoming?  Is their donation quickly acknowledged?  We are so familiar with our surroundings that sometimes it’s hard to think about it from a visitor or outsider’s perspective.  Your Challenge – Critically look around and find one or two things you can improve in the next week to make a better first impression.

2. Share only relevant and interesting info. Look at your website, brochure, latest direct mail letter, and newsletter. Remember, try reading these as a donor or prospective donor and see if anything stands out to you (if you just can’t do it, ask a friend or family member to read them).  Is the content relevant?  Is it mostly dry reporting of facts and numbers and a short “state of the organization?”  Now be honest, does this excite or motivate you?  It may not be doing anything for your supporters either.  Donors want to hear stories about the lives you are changing and the impact it has on them, the community, and the world.  You must share great stories that warm their hearts or even move them to tears.  You only need one good one to share each time so they aren’t overwhelmed.  It’s okay to include a few statistics for your number crunching readers, but focus on the stories.  You need to be working closely with your program staff and volunteers to get at least one new story to share each month.  Your Challenges:  (1) After looking through your communications, make a list of at least one thing for each communication mode that you could do differently to make them more donor-focused. Then work to incorporate these ideas in the next round of your communications.  (2)  Start collecting stories monthly from staff, volunteers, and those you serve about how your organization is changing lives and making the world a better place.

3. Follow up consistently. You don’t want your organization to be like the friend or relative who is only heard from when they want something.  Remember that when someone makes a financial investment, they like to know what’s happening as a result.  They could have given to any organization and they chose you.  Too often our only communication is to ask for money and we fail to follow up and let them know what’s happened since their gift and allow them join in our celebration when there’s a success.  Following up gives you an opportunity to reach out to your donor by sending a note or letter maybe with a picture, calling, or it might be a personal visit over coffee/lunch.  Your Challenge:  Choose a donor and make a progress update contact this week to thank them for their investment in your organization. Let them know you couldn’t do it without them. Do two donors if you can.  Then repeat each week until you at least work through the list of your best donors.

Doing something innovative? We’d love to hear about it!  Visit our Facebook page at www.Facebook.com/GetFullyFunded and share your story.

Top Fundraising Nuggets in 140 Characters or Less

By: Sandy Rees

Last week, I was in San Antonio for the annual AFP International Conference on Philanthropy. It was an amazing conference with many of the brightest minds in our field in attendance. Fortunately, many of those bright minds led workshops.

And since lots of us were tweeting like crazy (over 5,000 tweets from a 3-day conference!), most of the best tidbits can be found on Twitter.
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Of course, when I decided to do a compilation of my favorite nuggets, I saw that my friend Gail Perry had done the same thing. Great minds think alike! (You can read Gail’s article at www.gailperry.com). I’m going to share mine, too, and if you follow her too, it won’t hurt you to see some of these twice.

Here are some of my favorite takeaways.

Have you ever thought how different history would have been if Marin Luther King, Jr. had said “I have a strategic plan”? Dreams inspire. @gailperrync

How donors define oversolicitation: being asked to give again before learning first gift had an impact. @rachelmuir @gailperry

Your donors are being approached about & converted into monthly givers; get in the game or get left behind. @dan_blakemore

You don’t choose donors. They choose you. And then it’s your move. @SMacLaughlin

Opportunity only presents itself to a prepared mind. #gettingtoyes @FundraiserBeth

To get your nonprofit story right, step back! Think about your audience before you present your problem in your marketing. @rdhawthorne

It’s seven times more expensive to get new donors than to keep current ones. @mattforgood

Each ask should have 2 TYs: thanks (gratitude) and thanks (accountability; here is what your gift did). @donorguru @FundraiserBeth

Your challenge this year is to thank donors in a way that doesn’t require a #10 envelope. @donorguru @sldoolittle

55% of nonprofits have no plan for donor relations. @sldoolittle

Stop producing an annual report. Produce an impact report. Show where the money was used. (And put a face on the cover). @Network4Good

The internet is not “the Easy Button” for fundraising, especially mid-level donors. People still want meaningful contacts. @emthesooner

Millenials ACTIVELY follow only 5 organizations. If you don’t interact with them, welcome to their outer circle. @rdhawthorne

Donor loyalty is not about the donor being loyal to you, it is you being loyal to the donor. @harveymckinnon

Smiley faced kids don’t work! Sad faced kids tell donors “I can help those kids.”  @thattomahern @gailperry

Major gifts: What will the donor feel as a result of this cultivation move? @tammyzonker @gailperry

It’s not about the WHAT. It’s about the SO WHAT. @blackwelderlisa

Be clear about your #1 goal and measure it. @leamerman

Make communication with donors natural so they don’t say ‘oh dang, they’re cultivating me.’ Dan Samuels

And since I was tweeting out the nuggets from the sessions I attended, here are a few that I tweeted myself:

Complacency is enemy #1 for nonprofits.

There’s a difference between spectators and fans. What does your nonprofit have?

Stop asking people to support your annual fund. Boring. Ask them to help you change lives.

Build a brain trust of people to support and guide you. It’s a safe place to learn and grow.

If you are a workaholic, they will always expect you to be a workaholic. Time for a different strategy.

Overcoming the Fear of Raising Money – the First Step Toward a Successful Major Gift Campaign

By: Amy Eisenstein, ACFRE

I love Sandy’s post from earlier this month about “money ceilings” – the idea that most people have a limit, or “ceiling,” in terms of how much money they feel comfortable soliciting from a donor. In fact, reading that post reminded me of the many times I’ve had to coach my own clients through their fear of asking for any amount at all!

In my experience, many people are afraid to ask others for money. As Sandy says, our early experiences with money tend to determine how much we feel comfortable asking for – and whether we feel comfortable asking at all. In addition to the experiences she cites, though, I’d add one more: the fact that, at least in the United States, it’s considered impolite to ask someone how much they earn or how much they’re worth.

How can you ask for money if you don’t feel comfortable talking about money?                                                                                                                                                                       fundraising-consultant-amy-2

When working with clients – and in my recent book – I outline a few ways to overcome the fear of talking about and asking for money, particularly major gifts. The most important tip is to remember that soliciting major gifts (or any donation) isn’t about the money: it’s about what the money will allow your organization to do.

After all, money is just a tool; a tool you use to change lives, save lives, shelter people or animals, educate children … the list goes on.

In addition, you’re not merely asking for a major gift. You’re allowing your donor to have an impact on an issue they care about and make a difference in the world. Our donors don’t necessarily have the time or ability, for example, to single-handedly cook and serve meals to five dozen homeless people. But they can still feed those people; all it takes is their signature on a major gift check to your organization.

In other words, when you approach a donor for a major gift you’re not just asking for something – you are offering your donors the chance to make an impact that they can’t make on their own. New clients often don’t believe me at first, but the fact is that major gift donors actually thank fundraisers as much (or even more) than the fundraisers thank them!

If you’re working with board members or other volunteers who are having issues with soliciting major gifts, by all means follow Sandy’s suggestions for helping them (and yourself) find and break their money ceilings. But if the issue is a fear of talking about or asking for money in the first place, start out by reframing the conversation. Get your board and volunteers thinking in terms of tools and offering opportunities to donors and you’ll be surprised by how quickly many, if not most, of them lose their fear altogether.

Amy Eisenstein, ACFRE, is an author, speaker, coach and fundraising consultant who’s dedicated to making nonprofit development simple for you and your board. Her books include 50 A$ks in 50 Weeks, Raising More with Less, and her latest book, Major Gift Fundraising for Small Shops.

Special offer: be one of the first 100 people to purchase Major Gift Fundraising for Small Shops between 6 am – Midnight on Tuesday, March 18 and receive free access to Amy’s webinar, The Art of the Ask (a $129) value.  http://www.tripointfundraising.com/increase-your-annual-fund-with-major-gifts/

Gimme, Gimme … The downside of the freebie mindset

Free gifts - Sandy Rees, fundraising coach, Get Fully Funded

We all like getting something for free, right?

Many nonprofits depend on in-kind gifts (free stuff) to do their work. In fact, some of them thrive on it and celebrate that they have certain staff or volunteers who have great talent at “begging” and getting almost anything for free.

However, have you ever stopped to think about the mindset that goes along with that behavior?

If you are not careful, you can cross the line into a “freebie” or entitled mentality that is actually harmful to your organization. I know this might be hard to hear, but there might be some long-term consequences to consider. In other words, those in-kind gifts might be causing more harm than good.

When you get something for free, how does feel? Likely you’ll say it felt good because you saved your organization money. You consider it being a responsible steward of your resources. Getting things donated frees up cash to pay for other necessary expenses (i.e., staff salaries, utilities, and program materials).

There are reasons that some people prefer to make in-kind donations. For some you’re helping them find a new home for unwanted items (i.e., clothing and furniture). Some businesses like giving in-kind gifts because they can give you “scratch and dent” items that reduce their inventory. Others do it because they don’t feel they can afford to make a financial gift, but they can give you a little time or service. Some do it because they feel obligated to do some community service or that the gift will fulfill their annual obligation to you.

Do you see what’s missing here? Relationship.

Relationships are key.

You already know that.

Donors who give stuff are just as important as donors who give money, and they all need some nurturing in order to continue giving.

Think of all the people you do business with on a regular basis…the restaurant that caters your event, the accountant who does your audit, the lawyer who reviews your bylaws, the printing company that does your newsletter, the graphic design company who does your art work, or the tech company that provides your internet service. How many of these people donate their services to you? What kind of relationship do you have with them? Do you feel like you get good and prompt service like a paying customer? How does the donor feel about you?

Have you ever had a problem with someone who has donated their services? It’s often hard to ask them to go back and ask for revisions because they feel like they’ve done you a favor. It can be very awkward. You know that saying, “You get what you pay for?” Free isn’t always the best thing.

Donated services can be a huge blessing. The critical part is your attitude about the free stuff. If you think businesses should donate because your organization is nonprofit, and you are focused on the donation, that’s a Gimme mentality. If you invite businesses to donate because it’s a way they can participate in the good work you’re doing, and you want to create a situation where they give year after year, that’s a Partnership mentality. There’s a big difference and it has a big impact on whether or not that business will give again. Who wants to be part of a relationship where one side takes and takes?

What we’ve found is that when you beg and someone gives something, there is less expectation. In fact, sometimes they give just to get you out the door (and they hope you won’t come back!). There just isn’t the same amount of respect as a paying customer would get.

Think about this: What would happen if you quit begging for some services and paid for them instead? Would the businesses actually do more for you?

When people feel like they are valued for what they provide, they’ll often go above and beyond to help you get what you need. They become a true partner with you because your actions show that you value their expertise. Then they are then willing to invest in your organization, and are more willing to help, and even spread the word about the great things you do…because they are part of it.

There’s a deeper relationship built on mutual respect that’s developed. You won’t have to go find someone new for each project and beg them to donate. You’ve got a solid partnership with someone who knows and loves you and they’ll do whatever it takes to help you be successful.

What has your experience been with in-kind gifts vs paid services? Have you had an experience where getting something for free didn’t turn out to be so hot? Please share your story in the comments below.

How to Break Through Your Money Ceiling

Money Ceiling, Sandy Rees, Get Fully Funded, fundraising coach
Did you know there’s an upper limit to how much money you’re comfortable asking for? It’s called a money ceiling and we all have one.

We’ve all got a number and it’s somewhere close to the biggest gift you can imagine getting. Can you see yourself asking for and getting $500? How about $5,000? $50,000? $5 million? More? Think through the possibilities and see if you can find your money ceiling.

Whatever the number, anything beyond that feels unrealistic and is not in the realm of possibility. In fact, you may start to laugh at a certain number. When we do a money ceiling exercise in a workshop, the nervous laughter tells us when we’ve hit someone’s money ceiling.

Your money ceiling may be different from your coworkers or your Board. We’re all a little different. That’s because your money ceiling is set by your experience with money over your lifetime. Are you someone who has known what it’s like to not have enough money for basic needs or someone who has never struggled? Are you someone who struggles to live within their means or has a lot of debt? Were you taught to pay cash and avoid credit card debt? Was putting money away in savings something that was highly valued? All of this and more helped to set your money ceiling.

Why all this personal digging?

Because your personal money ceiling will have a huge impact on the amount of money you can raise.

Think about it – if you can’t imagine someone ever giving more than $5,000 to your nonprofit, you’ll never see donations come in higher than that.

Want to try to expand your money ceiling? It takes work. You must try very purposefully to get a gift that’s significantly higher than your money ceiling. Write that number down and post it where you can see it regularly. Get used to the number. Tell yourself it will happen. Heck, go ahead and write the thank-you letter that you’ll send when someone makes that gift. Then get ready, because it will happen.

If you really want to raise big money, you have to understand yourself and your personal attitudes around money. Remember this – you’ll never raise more money than you think you can.

So, as you think about raising your money ceiling and aiming higher, it’s important to be honest with yourself. Are you really willing to do whatever it takes to achieve your goal of raising more money…big money? When you can answer “Yes,” then you are ready.

We would love to hear to your thoughts about fundraising and the money ceiling or how you’ve worked to raising your money ceiling. Share your comments on the Get Fully Funded Facebook page at www.Facebook.com/GetFullyFunded.

Getting past ego-centric fundraising

 

 

 

7 tips for keeping donors interested in your fundraising communications

Fundraising communications - Get Fully Funded, Sandy Rees, fundraising coach

Have you ever had a conversation with your television? You know, one where you are screaming at the actor to look behind them or trying to convince a contestant to pick door #2?

While not the most perfect example of talking at people, it does spotlight a problem that I see many nonprofits make when communicating with donors.

Fundraising communications is meant to be a conversation – not a one-way street.

I understand you have a lot to share with your peeps. But being all talking and no listening makes donors feel used, invisible and unheard. And that is NOT how we want our valuable supporters to feel after hearing from us.

So, here are a few tips for authentically engaging with your donors in your fundraising communications:

1. Connect with them more often. If you are only sending one newsletter a year, then you are cramming a lot of information into a few pages, which can be overwhelming. Try sending information more frequently and in a variety of mediums.

2. Provide more quality and less fluff. Keep your donors in mind and only send them info that they would truly care about reading.

3. Give them a chance to ask questions, provide feedback and be heard. Whether through a survey or just simply asking them outright, invite donors to speak out.

4. Consider a variety of communication methods. Some people love printed newsletters. Others prefer email newsletters. Find ways to spread your reach by incorporating variety to your communications mix – email, social media, print, video, phone calls, live events, …

5. Make it super easy to contact you. That means adding staff email addresses and phone numbers (with extensions). Just sharing the general contact info tells donors that you really don’t want to be bothered. Invite them to connect with you.

6. Show you are listening by including donor ideas and comments in your correspondence. Add quotes from your Facebook page to your newsletters or write blog posts around a donor question. Find ways to show your donors that you hear them and that what they have to say matters to your organization.

7. Use this rule of thumb: One call-to-action per communication. What does that mean? If you send an email, don’t ask them to sign a petition, register for a seminar, read a report and buy tickets to your gala. That is way too much activity. Keep it to one action item per outreach (two, max) to make it easier for people to know what exactly what you want them to do.

Use these communications tips to keep your donor’s best interest in mind, while keeping them interested in what your organization is doing.

 

 

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Motivational Monday: Make magic

Make magic - Get Fully Funded, Sandy Rees, fundraising coach

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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